Why Invest in London?
According to the Knight Frank Wealth Report 2011, London has been ranked 2nd in the world’s leading cities in 10 years time. It has also been ranked 2nd in the Knight Frank Global Cities Index.
The report also signifies that although Asia dominates with regards to activity and price performance, the real success stories in 2010 confirms the advantages of a global brand and a diversity of brand requirements. London, New York and Paris have seen a strong demand and reasonably robust price growth.
Demand for second homes has been augmented by employment, education and lifestyle-driven purchases. This has led to double-digit growth in these markets, despite ongoing market uncertainty.
The Wealth Report also underlines the role of education and the significant increase in entrepreneurial classes sending their children overseas from the age of 16 to sixth form and high schools especially in the UK. At university level, a property for children to live in is an obvious step to take and a very popular investment option. Education serves as only part of the reason why overseas investors seek to purchase property. Wealthy Chinese have a universal desire to become global citizens and therefore acquiring a foreign passport and dual nationality supplicated with the status of sending their children to prestigious schools in the UK ferments their desire to relocate. Sky News reports that one in three of buyers of new properties in London come from China and Hong Kong, mainly in the £400,000 - £1mn bracket, either seeking accommodation for their children studying in London or simply an investment. If - or when - the sterling/dollar exchange rate recovers, their return will be enhanced by the increased return they could get when they take their money out of the UK market again.
Apart from the education benefits, London and surrounding Home Counties also offer overseas investors an opportunity to be part of historically rich country. From period style buildings to stately homes – there is a diverse range of properties to choose from. As well as old luxury properties, London also offers investors modern duplex apartments and modernized Victorian buildings with plenty of rooms and space.
London is also one of the foremost shopping destinations in the world with upmarket stores such as Harrods, Liberty and Selfridges, not to mention Saville Row and also the global designer outlets such as Emporio Armani, Gucci, Prada, Louis Vuitton and all the boutiques in Mayfair and Marylebone.
There are plenty of bars and restaurants to choose from as well as the gorgeous parks for both running and relaxing. The city also has the Big Ben, Tower Bridge the London Eye, and hundreds of historical locations rich in history. London also has the O2 arena for music events, Wembley Stadium for sporting events and the city will also be hosting the 2012 Olympic Games which will also boost house prices further.
The London Housing Market Report 2011 (http://www.london.gov.uk/) indicates a 6% growth in London house prices last year, the higher than any other region. The main house price indices indicate that overall London prices rose modestly in Q1 2011. The report also indicates:
- Majority of surveyors in London expect a rise in house prices In the next quarter 2011;
- There were around £1.5bn new housing orders in London in the last 6 months of 2010;
Below are figures obtained from Knight Frank indicating Prime Locations within the UK where international buyers have purchased properties:
Prime Location International Buyer % (source: Knight Frank Local View 2011)
Below are figures obtained from Knight Frank indicating the continental origins of buyers acquiring property as a second home and for relocation:
Where the wealthy want to buy and move to (source: Knight Frank Wealth Report 2011)